Aluminium settled down -0.56% at 114.65 as market players were cautious due to sluggish economic data from China and ahead of the Fed minute announcement. However downside seen limited underpinned by improving prospects for global growth and shrinking supply. China's consumer inflation cooled slightly more than expected in June, pointing to lingering weakness in the economy. Alcoa Inc has increased its estimate for the global aluminium market deficit this year due to capacity cuts in China, the world's No. 1 producer. The Federal Reserve revealed in the minutes of its June meeting released Wednesday that the US economy would have gathered pace in the second quarter and that the country’s labor markets are also expected to be stable. Nevertheless, some US Fed officials were concerned about persistently low inflation despite some recent higher readings as well as about declines in housing starts. Meanwhile, the US Fed plans to curtail USD 15 billion in its monthly bond purchases in October, with an optimistic view of the country’s economy. Alcoa, the world’s third largest producer of aluminum, kicked off the Q2 earnings season with better-than-expected results, fueling hopes among investors. Three-month aluminum on the London Metal Exchange jumped to USD 1,959/mt on Wednesday after opening at USD 1,937/mt as minutes of the Fed’s June meeting hinted no early interest rate hike. Technically market is under long liquidation as market has witnessed drop in open interest by -4.52% to settled at 6512 while prices down -0.65 rupee, now Aluminium is getting support at 114.2 and below same could see a test of 113.5 level, And resistance is now likely to be seen at 115.9, a move above could see prices testing 116.9.

Trading Ideas:

Aluminium trading range for the day is 113.5-116.9.

Aluminium dropped as market players were cautious due to sluggish economic data from China and ahead of the Fed minute announcement.

However downside seen limited underpinned by improving prospects for global growth and shrinking supply.

China's consumer inflation cooled slightly more than expected in June, pointing to lingering weakness in the economy.